Do Consumers Have Any Options If They Disagree With An Insurance Company?

Do consumers have any options if they disagree with an insurance company? The various rights that you have as an insurance policyholder can be enforced in several different ways. This all depends on the nature and extent of your dispute.

"Certainly!" says Clark Jackson, President and CEO of Jackson and Jackson Insurance Agents and Brokers in Glendora, California. "The various rights that you have as an insurance policyholder can be enforced in several different ways. This all depends on the nature and extent of your dispute. In some states, such as California, if there is a disagreement over whether the insurance policy adequately covers the amount of your loss, the insurer must provide legal counsel for you in any court proceeding that litigates the question of insurance coverage. In addition, most insurance contracts have provisions for arbitration contained in them if you and your insurance company are at loggerheads on specific issues."

"You can also file a complaint with the Department of Insurance," he recommends, "and ask them to intercede on your behalf. Be aware that the Department of Insurance will not get involved in issues involving coverage or liability disputes, but what they can do is enforce the laws regarding fair and expeditious claims practices." This includes timeliness of responses and other requirements the state makes of insurance companies when they are settling claims for their insureds. Many disagreements come from failure of the insurer to communicate in a timely basis about what is happening with the claim. Both your agent and the Insurance Department of your state can help in this regard.

"When you're first involved in an accident," he says, "your insurance company will provide you with forms to fill out that not only ask you to identify the other parties involved and their contact and insurance information but also a detailed description of what happened, contact information for any witnesses at the scene, and the estimated amount of damage. Since most people don't anticipate being in an accident, however, they end up relying on their memory. This - and the lack of a paper trail - can prove problematic if a dispute arises. If you haven't been in the habit of keeping good records up until now, it's not too late to start. This includes keeping copies of correspondence and emails related to the filing of your claim, memorializing phone conversations, and not just throwing your pertinent receipts into the bottom of a drawer." In the event that a dispute does arise, a well documented case will strengthen your chances of a favorable outcome far better than vague recollections of who said - or promised - what.

In some states, policyholders have the right to sue for bad faith claims practices. This is an extreme measure that usually involves egregious conduct on the part of the insurance company. "Unfortunately," Jackson says, "this does happen. While retaining the services of a lawyer may prolong the successful settlement of your claim, it is also a resource that may be available to you under certain circumstances. Know your rights, both as a consumer and as a party to the insurance contract, before a dispute ever arises. You will be better prepared to deal with conflict if you do." In addition, be aware that adjusters and investigators are not allowed to violate your rights as a claimant under today's State and Federal privacy laws. If you feel your privacy has been jeopardized in the course of the claims dispute process, you are within rights to report it.

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